Trillions of dollars are pouring into digital assets like cryptocurrencies, but almost no one understands them, according to a recent survey.
In fact, 98% of survey respondents across the U.S., Mexico and Brazil can’t pass a basic cryptocurrency literacy test, according to CryptoLiteracy.org, an industry group promoting consumer education on digital assets.
While Americans, who had a 96% fail rate, fared slightly better on the 17-question CryptoLiteracy test than their Mexican and Brazilian counterparts, who had a 99% fail rate, the gap between knowledge and participation in cryptocurrency investing means many, perhaps millions of people, are investing into assets they don’t really understand.
“Our industry needs to do more to improve crypto literacy throughout the world. By doing so, we can help people improve their lives by understanding how to utilize cryptocurrencies,” said Neil Bergquist, CEO and co-founder of Coinme, a network of bitcoin kiosks and ATMs, in released comments. “As a champion of equal and simple access to digital currencies, Coinme is proud to lead this effort in collaboration with key industry partners.”
The quiz asked participants to answer questions on cryptocurrencies, bitcoin, decentralized finance (DeFi), blockchain, mining, wallet types and NFTs.
The pass rates, ranging from 1% to 4%, fall well below adoption rates. According to CryptoLiteracy, 17% of U.S. investors have adopted cryptocurrencies, compared with 14% of Mexicans and 15% of Brazilians.
Lack Of Fundamentals
Four in 10 respondents globally didn’t understand what determines the price of cryptocurrencies, and approximately 90% didn’t know that bitcoin’s total supply was limited to 21 million tokens. However, owning cryptocurrency was associated with higher performance on the literacy test.
In the U.S. alone, four in 10 respondents failed to answer over half the questions, choosing “don’t know” as their answer.
The survey also found some deficiencies in the cryptocurrency universe. While enthusiasts push bitcoin and other tokens as possible routes to greater financial inclusion for minorities, emerging market populations and other groups with lower levels of access to financial services, CryptoLiteracy found that cryptocurrency owners tend to be younger, wealthier and more male than the greater population.
There were also clear divisions in crypto use cases by geography and generation, with Americans and older investors more likely to see crypto as a store of value and an investment, and a greater proportion of younger investors, Mexicans and Brazilians viewing crypto as a payment method.
Brazilian (30%) and Mexican (28%) respondents were more likely to say they plan to buy cryptocurrencies over the next six months than Americans (12%).
CryptoLiteracy’s inaugural survey was fielded by YouGov among 1,000 internet users self-declared as “cryptocurrency- or bitcoin-aware.”